Is output growth of Korean manufacturing firms productivity-driven?

This paper examines the sources of output growth and total factor productivity (TFP) growth of four selected South Korean manufacturing industries from 1980 to 1994. Unlike previous studies, this study is enriched by the use of firm level data within each industry and the application of the random coefficient frontier model. Empirical results show that output growth in the manufacturing industries is increasingly productivity-driven. But the varying sources of TFP growth (i.e. technical progress and gains in technical efficiency) within the industries present an urgent need to reexamine the effect of government policies and other factors to formulate specific policies for sustainable TFP growth.